Fannie Mae on Tuesday slashed its stock dividend in half to raise money to help it comply with new capital requirements imposed on the mortgage finance provider in the wake of an accounting scandal.Fannie said it would reduce its common stock dividend by 50 per cent to 26 cents per share for the first quarter, and said its board would assess future dividend payments quarter by quarter. The company had some 968m common shares outstanding at the end of June, according to its annual filing with the Securities and Exchange Commission.
The stock traded down near 68 in the after-market. Like the last time there was bad news, I could easily see the stock going either way tomorrow. Over the long-term I don't see why anyone owns it or how their business model is effective if the gov't is considering a complete privatization. The market to date has not really agreed with that view. It will be more interesting to see if the banks and brokers that traded strong today can keep their gains.
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